Former Nakheel Executives Cleared In Dubai Court

Five years ago, Matt Joyce and Marcus Lee were riding the crest of a real estate boom in Dubai. As managing director of the government-owned developer Nakheel’s Waterfront project, Mr. Joyce was helping push the boundaries of the city outward. The project, which his colleague Mr. Lee was also working on, was to develop Dubai’s last major remaining stretch of shoreline toward its border with Abu Dhabi.

After the emirate’s property bubble burst in late 2008, though, the two men were accused of fraud by Sunland, an Australian developer with which they had business dealings on the Waterfront project, and were later detained. They spent nine months in jail in 2009 before being released and put under house arrest. That’s the legal limbo they’ve been in until this past weekend, when a Dubai court cleared both men of wrongdoing, bringing to an apparent end their five-year-old ordeal.

Dubai’s public prosecution could still make an appeal to the emirate’s highest court; barring that, Mr. Joyce and Mr. Lee will be free to go home. The ruling follows Sunland’s decision to drop a $14 million claim back in Australia against Mr. Joyce and a third Australian named Angus Reed last month.

While many boom-era real estate executives are still in Dubai’s jails, the cases involving Mr. Joyce and Mr. Lee are the last major ones lingering after the property-market collapse and subsequent anti-corruption push by the Dubai government. Zack Shahin, the former chief executive of Deyaar Development, was the first high-profile arrest in 2008; he was later convicted of bribery and is serving a 15-year prison term. Plenty of cases involved allegations of fraud, although many more executives were detained simply for writing company checks that bounced – something that remains a criminal offense in the U.A.E.

The stories of Mr. Joyce, Mr. Lee and other former Dubai executives aren’t front-page news any more. The emirate’s real estate market is booming again – apartment and villa prices went up by 42% on year in the third quarter, according to a recent report from local brokerage Asteco – and Dubai is busy bidding to host the 2020 World Expo, which could give another boost to the market if it wins.

The fates of Mr. Joyce, Mr. Lee and other former executives, however, might serve as a warning for people riding the crest of the latter-day wave: a fall from grace in Dubai’s legal and political system can be just as rapid as the rise.